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London open: Stocks nudge up as investors mull jobs data
London stocks were just a touch higher in early trade on Tuesday as investors mulled conflicting UK jobs data.
At 0830 BST, the FTSE 100 was up 0.1% at 8,420.17.
Figures released earlier by the Office for National Statistics showed that unemployment nudged higher in March, in line with expectations, despite wages continuing to grow.
The unemployment rate was 4.3% in January to March, up from 4.2% previously.
The claimant count also rose in April, by 8,900 on the month and 29,300 on the year, to 1.58m.
The number of payrolled employees fell by 5,000 between February and March, although it rose by 288,000 year-on-year.
The early estimate for payrolled employees for April decreased by 85,000 on the month. Year-on-year it nudged 0.4% higher, to 30.2m.
Job vacancies continued to decrease, meanwhile, down 26,000 on the quarter to 898,000.
The data also showed an increase in average earnings, however, despite the cooling jobs market.
The annual growth in employees’ average regular earnings, excluding bonuses, was 6% in January to March. Including bonuses, growth held steady at 5.7%. Analysts had expected it to slow to 5.5%.
Danni Hewson, head of financial analysis at AJ Bell, said: “Andrew Bailey made it clear that ratesetters would be carefully considering the array of economic data barrelling our way between this month’s Bank of England decision and the next meeting in June.
“Today’s jobs figures do little to move the dial with the labour market continuing to cool but wage growth coming in hot. Once our nemesis inflation is taken into account average regular earnings jumped 2.4%, the highest in almost three years.
“Whilst that does mean a few very welcome extra pennies in our pockets, good news for workers is likely to be viewed as bad news by market watchers.
“Getting inflation down to 2% is only one part of the task the Bank of England is facing. The harder bit will be keeping it down as the impact of those huge energy shocks we felt last year finally wash through the system.
“Every extra penny we feel confident to spend has the potential to add a little bit more kindling to the smouldering inflation pyre and looking at rate cut expectation following the release of today’s figures, it’s a coin toss as to whether the temperature will reach just the right level by 20 June.
“What we can see is that the post-pandemic labour boom is well and truly over. Though vacancy numbers are still above pre-Covid levels, they are steadfastly ebbing away as positions are filled or businesses re-write their plans. And the conundrum of a stubbornly high economic inactivity rate remains.”
In equity markets, telecoms giant Vodafone rallied after it posted slightly better annual results than forecast as it continued to offload businesses and move towards its tie-up with rival operator Three. Operating profit fell 74.6% to €3.7bn, mainly as a result of disposals in the prior financial year, in particular the €8.6bn gain on disposal of Vantage Towers.
Electricals retailer Currys surged as it lifted its full-year profit expectations, hailing a return to like-for-like sales growth. Full-year pre-tax profit excluding the Greek business is now expected to be between £115m and £120m, up from previous guidance of “at least” £105m.
Online electricals retailer AO World also racked up strong gains.
DCC slumped as its full-year revenue and adjusted earnings per share missed analysts’ forecasts.
Flutter Entertainment lost ground as it said net losses widened to $177m in the first quarter from $111m, mainly due to non-cash charges.
Bakery chain Greggs fell as it maintained full-year earnings forecasts as underlying sales grew 7.4% in the first 19 weeks of this year in what it called a “challenging market”.
Anglo American was in focus again as it announced a “major new phase” in its strategy as it makes radical changes to its business structure to drive shareholder returns and save costs, including the divestment or spin-off of its steelmaking coal, nickel, platinum and diamond operations.
On Monday, the miner said it had rejected a second, £34bn takeover offer from Australia’s BHP.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Burberry Group Plc | +2.79% | +32.50 | 1,197.50 |
| 2 |  |
Bhp Group Limited | +2.50% | +57.00 | 2,339.00 |
| 3 |  |
Vodafone Group Plc | +2.23% | +1.56 | 71.54 |
| 4 |  |
Ocado Group Plc | +1.58% | +5.40 | 347.40 |
| 5 |  |
Smith (ds) Plc | +1.25% | +4.60 | 371.40 |
| 6 |  |
Sse Plc | +1.11% | +20.00 | 1,820.00 |
| 7 |  |
Hargreaves Lansdown Plc | +1.05% | +9.00 | 870.00 |
| 8 |  |
Scottish Mortgage Investment Trust Plc | +1.00% | +8.80 | 887.00 |
| 9 |  |
Relx Plc | +1.00% | +34.00 | 3,445.00 |
| 10 |  |
Kingfisher Plc | +0.98% | +2.60 | 267.90 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Dcc Plc | -4.74% | -280.00 | 5,625.00 |
| 2 |  |
Anglo American Plc | -2.97% | -80.50 | 2,626.50 |
| 3 |  |
Flutter Entertainment Plc | -1.85% | -300.00 | 15,890.00 |
| 4 |  |
Direct Line Insurance Group Plc | -1.51% | -3.00 | 196.00 |
| 5 |  |
Taylor Wimpey Plc | -1.12% | -1.60 | 141.60 |
| 6 |  |
Crh Plc | -1.06% | -70.00 | 6,508.00 |
| 7 |  |
Berkeley Group Holdings (the) Plc | -1.06% | -55.00 | 5,155.00 |
| 8 |  |
Persimmon Plc | -1.03% | -14.50 | 1,399.00 |
| 9 |  |
Legal & General Group Plc | -1.02% | -2.50 | 243.80 |
| 10 |  |
Ferguson Plc | -0.99% | -175.00 | 17,450.00 |
US close: Stocks mixed as investors await CPI reading
Wall Street stocks turned in a mixed performance on Monday following a winning week for the Dow.
At the close, the Dow Jones Industrial Average was down 0.21% at 39,431.51, while the S&P 500 lost 0.02% to 5,221.42 and the Nasdaq Composite saw out the session 0.29% firmer at 16,388.24.
The Dow closed 81.33 points lower on Monday, taking a bite out of gains recorded in what was the blue-chip’s best week so far this year.
As for the new week, market participants will hope to gain further insights into the Federal Reserve’s thinking when it comes to the future of monetary policy, with April’s consumer price index report set to be published on Wednesday. Investors will look to see numbers that signal a return to rate hikes being largely off the table despite several pieces of hotter-than-expected inflation data in recent months.
On Monday, Federal Reserve Bank vice chair Philip Jefferson said it was appropriate to keep interest rates steady until there was additional evidence that inflation will return to the central bank’s 2% target.
However, the Dow headed south after the New York Federal Reserve revealed that consumers raised their expectations for price increases in both the near and long term in April. On a year-on-year basis, inflation expectations rose to 3.3%, while the five-year outlook ticked up to 2.8%.
In the corporate space, GameStop surged after the Reddit trader behind 2021’s short squeeze posted for the first time in three years.
Tuesday newspaper round-up: Tesco, OpenAI, housebuilding
Tesco is facing criticism from “shocked” charities who say they are struggling to distribute unwanted food to homeless and hungry people after they claim the retailer brought in rules that mean unwanted food can only be collected in the evening. The supermarket group has switched to a new system which asks charities to pick up unwanted food, such as items reaching their best before date, only in the evening when a store is closing rather than the following morning, the charities have claimed. – Guardian
OpenAI announced on Monday that it was launching its new flagship artificial intelligence model, called GPT-4o, as well as updates that included a new desktop service and advances in its voice assistant capabilities. Chief technology officer, Mira Murati, appeared on stage to a cheering crowd in the OpenAI offices, touting the new model as a step forward in AI. The new model will bring the faster, more accurate GPT-4 AI model to free users, where it was previously reserved for paid customers. – Guardian
Plans for a large nuclear power station on the Welsh island of Anglesey risk being derailed by government rules that will add an estimated £20bn to the national debt, insiders have warned. Efforts to develop a gigawatt-scale scheme at Wylfa are on the agenda this week as Andrew Bowie, the minister for energy security, meets representatives from the South Korean state nuclear company Kepco. The company is among several thought to be in the running to build a plant at Wylfa, with a consortium that includes US nuclear giant Westinghouse also putting forward proposals. – Telegraph
It was billed as potentially one of the most aggressive sighting shots against a FTSE 100 company. In March the New York-based activist investor Elliott Advisors disclosed that it had quietly built a 5 per cent stake in Scottish Mortgage Investment Trust (SMT). Elliott’s reputation for ferocity and opportunism has been second to none. It once seized an Argentine warship to apply pressure for a payout to bondholders. It has previously targeted another giant UK investment trust, Alliance Trust, in a siege that led to the expulsion of its chief executive Katherine Garrett-Cox, or Katherine the Great as she was dubbed in parts of the City. – The Times
Mortgage market pressures and wet weather drove a fall in new homes being built in the first quarter, new industry figures show. The number of new homes registered for construction slumped by a fifth year on year to 21,967 in the three months to the end of March. The number of new properties that were completed also slid by 13 per cent to 26,240, according to the National House Building Council. – The Times
